Recorded at the Mises Institute in Auburn, Alabama, on 30 July 2022.
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Toby Baxendale on the Coming Financial Repression
vor 12 StundenUK entrepreneur and founder of the Cobden Centre Toby Baxendale joins Bob to discuss meeting Hayek, the history of economists supporting 100% reserve banking, and the tools central banks and governments will use to enact "financial repression."
Cryptocurrency as Money—Store of Value or Medium of Exchange?
vor einem TagStandard neoclassical definitions of money call it a means of exchange and a store of value. But is this correct? Original Article: "Cryptocurrency as Money—Store of Value or Medium of Exchange?" This Audio Mises Wire is generously sponsored by Christopher Condon. '
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Peter Klein: Why Managers Still Matter
4.10.2022Entrepreneurial businesses embrace adaptiveness and change, and continuous innovation enabled by flexible and responsive organizations, empowered at every level. That doesn’t mean there’s no role for managers. Inside the corporation, entrepreneurial management co-ordinates the business flow of responding to changing customer wants and preferences, so that resources are allocated and reallocated to the production activities that customers value the most. In fact, management is becoming more important, not less. Professors Peter Klein and Nicolai Foss explain entrepreneurial management in their latest book, Why Managers Matter: The Perils of the Bossless Company (Mises.org/E4B_190_Book), and Peter Klein visits Economics For Business to highlight the key points. Key Takeaways and Actionable Insights Management co-ordinates the constant flux of entrepreneurial business. The essence of the adaptive entrepreneurial organization model is responsive change. Entrepreneurial businesses don’t lock themselves in to 5-year strategies and annual plans. They recognize that markets are in constant flux as a result of changing customer preferences, changing competitive activity, changing technologies, and changing conditions in business channels and in the economy. Change is the normal condition. It’s what Ludwig von Mises termed constant flux. Management is required inside the firm to adapt and respond to change outside the firm. It’s not possible to manage the change in markets, but it is a necessity to manage resource allocation and productive activities inside the firm. Management is co-ordination and orchestration, not authority and hierarchy. We might think of the concept of management in its industrial age guise of authority and hierarchy: some people “higher up” in the organization telling others “lower down” what to do. This kind of hierarchical authority can’t work in the digital network age; it’s too slow to process incoming data from the marketplace and too rigid to quickly or effectively implement newly imagined responses to those incoming data. But in Professor Klein and Professor Foss’s analysis, management no longer equates to old-fashioned authority and hierarchy. Management is co-ordination: assembling the right resources — both human capital and complementary capital assets such as supportive technologies — in the right combinations (often referred to as “teams” in today’s management language) for the right shared task with the right shared goals. Professor Klein likened this to orchestration — there’s a conductor who guides the orchestra in playing the same symphony together, without telling the individual players how to play their instrument, and leaving the details of implementation to the individuals and their specialized skills. Some orchestras may have better results than others because their teams have been well-recruited and well assembled and they respond better to management co-ordination. All firms and teams are complex adaptive systems, with emergent outcomes influenced by internal forces, one of which is management. Management is culture more than authority. How do managers achieve a better outcome as a result of managing their teams? Professor Klein believes that they institute a successful culture, as opposed to designing an organizational structure. He defines culture in terms of norms, customs and practices — the accepted way (or simple rules) of “how we do things around here”. More specifically, in the customer-centric entrepreneurial firm, “here’s how we plan to facilitate value for our customers around here”. Skilled managers paint the pictures — the “vision”, if you will — in the minds of employees of the customer value standards the firm will achieve, and the customer experiences that the firm will facilitate. Modern managers are comfortable with and quite expert at adaptation. The modern managerial culture is a far cry from traditional hierarchical managerial authority. It has the built-in flexibility for adaptiveness to the rapid rate of change in today’s digital business world. A well-functioning management process in a loosely structured organization can change internal production processes, teams and resource allocations in response to external changes in customer demand and marketplace conditions. In fact, Professor Klein points out, through relevant case studies, such a management structure can be better at adaptation than, for example, a network of independent contractors and suppliers that would be challenged to orchestrate responsive changes to an external change, since each would have a different experience and process it through a different cultural orientation. They wouldn’t co-ordinate as well or as quickly as internally managed teams. In certain cases, management authority can sometimes be a relevant organizational tool, so long as it is applied in a contingent fashion. The relevance and usefulness of authority varies by circumstance and business situations. Its usefulness is contingent, and managers must be sensitive as to when to apply authority and in what style. Why Managers Matter identifies two distinct styles of managerial authority, Mark 1 authority and Mark 2 authority. Mark 1 authority is traditional command-and-control, exerted top down — superiors telling subordinates what to do. Mark 2 authority is exercised through design rather than command: finding the right person for the task, combining the best-qualified people in teams, and giving them a goal with a wide latitude in their process and implementation in achieving the goal. An important element of the contingent approach is to empathically identify the subjective preferences of employees. Some will respond well to flexible, open-ended direction that enables them to exercise their own initiative. Others might prefer the certainty of clear direction. One type of salesperson might be highly motivated by a 100% commission remuneration plan, another might feel more secure with a base salary with the potential for an achievement bonus upon exceeding quota. Professor Klein identifies two broad sets of conditions for the exercise of Mark 1 and Mark 2 authority. When there is a high degree of interdependence between people, teams and tasks, such that it is critical that tasks are highly coordinated, completed at the same time and combined in a highly specific fashion, then management intervention is required and it will include Mark 1 elements. When production is more modular, when tasks and projects can be completed interdependently, then Mark 2 management can be exercised through a decentralized, flat and culturally aligned organization. (Professor Klein cited the example of the type of higher education institution where he works; all the professors can design and teach their classes, do their research, and publish their papers and books with a high degree of autonomy.) Management is becoming more important, not less. In a rapidly changing world, where employee attitudes and experiences are very different than in the pre-digital world, and where global markets and their interconnected structures are more uncertain and cyclically unreliable, and where the pace of disruptive technological innovation is accelerating, good management is more important than ever for the success of our economy and our society. Smart managers are needed to find the right balance between operational excellence through established processes and adaptive change through adjustment and experimentation, a balance that business scholars call the ambidextrous organization. It can’t happen without management, and without managers. Additional Resources Peter Klein’s book page: Mises.org/E4B_190_Klein Why Managers Matter: The Perils of the Bossless Company by Peter Klein and Nicolai Foss: Mises.org/E4B_190_Book Public Affairs book page: Mises.org/E4B_190_PA
Genuine Recovery Is Up to Investors, Producers, and Consumer Choice
3.10.2022Recovery is genuine only when it reaches the masses of individuals. And recovery comes only from the actions of individuals acting in a free market. Original Article: "Genuine Recovery Is Up to Investors, Producers, and Consumer Choice" This Audio Mises Wire is generously sponsored by Christopher Condon. '
Obama's Forgotten Child Hunger Debacle
3.10.2022Barack Obama promised to "end child hunger" by 2015. Michelle Obama promised to end childhood obesity. Unfortunately, both increased in large part because of the Obama programs. Today, President Biden will declare war on "hunger in America." Stay tuned. Original Article: "Obama's Forgotten Child Hunger Debacle" This Audio Mises Wire is generously sponsored by Christopher Condon. '
In Latest Recession Signal, Money-Supply Growth Plummeted to a Three-Year Low in August
3.10.2022The money supply is on a long and fast downward trajectory. This points toward recession and is just one more indicator of economic weakness in addition to negative GDP and an inverted yield curve. Original Article: "In Latest Recession Signal, Money-Supply Growth Plummeted to a Three-Year Low in August" This Audio Mises Wire is generously sponsored by Christopher Condon. '
How the Policy of Price Stability Generates Greater Economic Instability
3.10.2022The Fed claims 2 percent inflation promotes "price stability." However, that policy also causes the boom-and-bust cycle, which is anything but stable. Original Article: "How the Policy of Price Stability Generates Greater Economic Instability" This Audio Mises Wire is generously sponsored by Christopher Condon. '
Student Loan Forgiveness Treats the Symptom, Not the Disease
3.10.2022President Biden's recent student loan forgiveness initiative only exacerbates the real problem: the cost of a college education, thanks to government intervention, is outrageously high. Original Article: "Student Loan Forgiveness Treats the Symptom, Not the Disease" This Audio Mises Wire is generously sponsored by Christopher Condon. '
The Economics of War
30.9.2022Daniel McAdams of the Ron Paul Institute joins Jeff and Bob to discuss the economic and political ramifications of the Nord Stream 2 pipeline sabotage. Read "The Economics of War" from Human Action: Mises.org/HAP363-1 Read a study Bob co-authored on Europe's energy crisis: Mises.org/HAP363-2